Successful founders prioritize cash upfront over potentially larger payouts from complex earnouts. Earnouts often underperform because founders lose control of the business's future performance, leading to dissatisfaction despite a higher on-paper valuation.

By defending the pro rata rights of early backers against new, powerful investors, founders play an "infinite game." This builds a reputation for fairness that compounds over time, attracting higher-quality partners and investors in future rounds.

Club Penguin's co-founder warns that accepting VC money creates immense pressure to become a billion-dollar company. This often crushes otherwise successful businesses that could have been profitable at a smaller scale, making founders worse off in the long run.

Large, multi-stage funds can pay any price for seed rounds because the check size is immaterial to their fund's success. They view seed investments not on their own return potential, but as an option to secure pro-rata rights in future, massive growth rounds.

When buying Twitter, Elon Musk signed contracts in his own name, signaling ultimate personal commitment. In contrast, the Ellisons used a legally-shielded revocable trust for their Paramount bid. This reveals how a founder's core psychology and risk tolerance directly shape their high-stakes negotiation and financing strategies.

When a company like Synthesia gets a $3B offer, founder and VC incentives decouple. For a founder with 10% equity, the lifestyle difference between a $300M exit and a potential $1B future exit is minimal. For a VC, that same 3.3x growth can mean the difference between a decent and a great fund return, making them far more willing to gamble.

An exit that provides a significant financial win but isn't enough to retire on can be a powerful motivator. It acts as a 'proof point' that validates the founder's ability while leaving them hungry for a much larger outcome, making them more driven than founders who are either pre-success or have achieved a life-changing exit.

Musk's performance-based compensation sets a precedent for other CEOs to approach their boards with ambitious growth targets in exchange for significant equity increases. This challenges the traditional one-way dilution model for founders and executives.

The venture capital return model has shifted so dramatically that even some multi-billion-dollar exits are insufficient. This forces VCs to screen for 'immortal' founders capable of building $10B+ companies from inception, making traditionally solid businesses run by 'mortal founders' increasingly uninvestable by top funds.